Rivals no more

Folio: The Magazine for Magazine Management, Nov 1, 1992 by Ron Scott

Let's start building a coherent circulation policy coordinating subscription and newsstand sales.

With advertising revenue streams at near-drought levels, circulation revenue has become a high priority for most publishers, yet I have seen little or no attempt to organize circulation activities to meet a specific balance of subscription and newsstand circulation goals. It is reported, for example, that the latest ABC FAS-FAX shows magazine A with a 6 percent increase in newsstand circulation and a 2 percent drop in subscription circulation--as if these were unconnected events. Perhaps they were. But they should not have been; and they need not have been. Circulation management means coordinating both newsstand and subscription circulation to meet a stated magazine circulation rate base at the lowest possible cost. It means no bias, no preconceived opinions and no second-class status for either option. What follows is a case history of good circulation management.

Of the readers who bought the January 1991 issue of Astronomy on the newsstands, 8.5 percent responded to the subscription offers contained inside. And 7.8 percent of those newsstand buyers paid in full for their subscriptions. Put another way, that same issue sold 23,360 copies from a printrun of 49,915, for a sell-through of 46.8 percent. From that sale of 23,360 copies, 1,981 readers responded through blow-in cards, bind-in cards and order forms. Of those 1,981 responses, 1,825 were paid in full.

If you believe that this is a one-time, spectacular fluke in an otherwise ordinary series of sell-throughs and paid subscription response, you are wrong--although the 7.8 percent net-paid figure is one of the better ones. But that's not the end of the story.

The first issue of Astronomy to be offered through the mass market channel of distribution was September 1982. It sold 19,863 copies. Through the end of 1991, there have been 112 issues of Astronomy offered at retail. The average net paid subscription acquisition from each of those 112 issues has been in excess of 1,000; that is, 112,000 subscribers have been acquired from newsstand circulation in nine years and four months. Yet the January 1992 issue of Astronomy sold 29,857 copies for a sell-through of 59 percent. That is not a misprint: 59 percent.

The point is this: Those of you who think that high newsstand sales and strong subscription sales can't exist together should think again. And those of you who think newsstand sales and subscription sales should function independently of each other are making a serious tactical mistake.

Making it work

Simply to decree that subscription and newsstand efforts must be coordinated is not enough. Very few people respond well to any decree that lacks a personal incentive, that doesn't give them a personal stake in the success of the venture. What will do the trick, in my opinion, is circulation revenue sharing. If newsstand circulation is a source of subscription acquisition, it should receive some reasonable revenue credit for it--just the way outside services like PCH do. Similarly, if subscription promotions contain messages encouraging 96 percent of the people who decline to subscribe to try a copy at the newsstand (which few promotions do and more ought to do), then newsstand should pay a reasonable part of the promotion's cost.

Because subscription mailings are becoming increasingly expensive, I believe they must do more than simply acquire subscribers; they must encourage people to want to read our magazines. They should encourage readers to try us on the newsstands, just as our newsstand copies encourage readers to subscribe.

In a past issue of FOLIO: ("Newsstand profitability," November 1992, page 128), I suggested that subscription circulators let their newsstand people know where subscribers who are not renewed as a result of rate-base cuts are located so that the newsstand people could try to convert them to buying at retail. It sounded eminently reasonable to me, but if anyone did what I suggested, I never heard about it.

Years ago, Shirrel Rhoades, then with Family/Home Computing, and I did a seminar in which he described the coordination of the newsstand launch of a new magazine to match the PCH mailing on the same magazine. His theory was that the PCH mailing would increase name awareness, and the newsstand copies would show potential subscribers what the actual magazine was like. You may think this was only crudely innovative, given the enormous increase in computer power available to us today, but for its time, it was a pretty good idea. To my knowledge, it has never been duplicated.

The new partnership

Newsstand and subscription circulators ought not to be distant relatives; they ought not to be rivals. They should be partners. We keep them from being so by antiquated and prejudicial accounting systems that fail to apportion rewards based on results. Changing accounting systems without disturbing corporate accounting procedures is not that difficult, given the potential rewards. And rewarding circulators based on the results is not that difficult either.